The High Court ruled that CTO Greenclean Environmental Solutions Ltd should be wound up after finding that the company had not shown substantial grounds for arguing that Louis J. O’Regan Ltd was barred from enforcing a judgment debt. The court adjourned the petition, however, to allow the petitioner to nominate a different official liquidator and provide evidence of that person’s suitability. It also said the petitioner’s solicitors should not continue acting in the case.
The petitioner had obtained a €596,802 judgment against CTO Greenclean in October 2010. It later sought a winding-up order, saying the company had not paid after receiving a statutory demand. The company resisted, alleging that at a meeting in October 2010 the petitioner had agreed not to enforce any judgment if the company did not defend the underlying Commercial Court proceedings. The petitioner denied making that agreement.
The judge said the evidence on the alleged promise was difficult to resolve, despite cross-examination of witnesses. She found that the evidence did not establish, on the balance of probability, that the petitioner had represented it would not enforce the judgment or seek liquidation. She was not satisfied that the company had substantial grounds for claiming it was protected from the winding-up petition by estoppel.
The judgment also considered a €230,000 garnishee payment that the petitioner received from Hammond Lane Metal Company Ltd in part satisfaction of the debt. The judge said that payment should have been disclosed in the winding-up petition. She noted that an agreement made in March 2011 provided for pursuing the company’s claim against Hammond Lane and splitting net proceeds between CTO Greenclean and the petitioner, but said the evidence did not show that the company was then in a position to pursue that claim through litigation.
The court described the evidence as strongly suggestive of insolvency. CTO Greenclean was no longer trading, had no employees and had cash “close to zero”, according to evidence from director Patrick Boardman. Its latest filed accounts described falling demand, an ongoing monthly shortfall and much-reduced cash reserves. The judge considered it a suitable case for a winding-up order.
The court did not appoint Sean O’Riordan as liquidator because of his prior involvement in the matters between the parties. The petition was adjourned for an alternative nominee and evidence of suitability. The judge also considered it inappropriate for James Riordan and Partners to continue acting for the petitioner, given the firm’s involvement in correspondence that appeared to be on behalf of the company.